The pair runs its second straight positive week and heads towards its first profitable month since May, with gains of around 2% at the time of writing. The US Dollar deflates this week, as markets scale back their previously heightened expectations around the Fed's tightening cycle, but still foresee aggressive moves.
At the time of writing CME's Fed WatchTool projects another 75 basis points hike next week with near certainty, but is now split between 75bps or 50bps in December. 
The European central was late to the rate-hike bonanza, but has already delivered 125 basis points of hikes in just two meetings. Officials have pointed to more tightening ahead and have employed mostly hawkish commentary, so another big move could be on the cards at Thursday's meeting.
Markets also expect the latest PCE inflation figures form the US and the first preliminary GDP reading for Q3, after two consecutive quarters of contraction. As such, caution is needed, since all of those events can spur volatility and impact the trajectory of EUR/USD.
From a technical prospective, the pair now trades well above the EMA200 and tries to surpass the daily Ichimoku Cloud, which could give it the chance to challenge 1.0198. A broader recovery to the 1.0369-1.0450 region would require a fundamental catalyst.
The common currency is not yet convincing, as its recent visits above the EMA200 were short-lived and has stayed below the cloud for many months now. Furthermore, the RSI is overbought and a pullback towards 0.9700 would not be surprising, although fresh 2+year lows (0.9535) seem harder at this stage.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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